Renewable Energy Outlook And Perspectives In Pakistan

On behalf of The World Wind Energy Association (WWEA) and Global 100% RE platform along with supporting partners invite me to the first ever Pakistan Renewable Energy Summit 2019 (PRES2019) will be taking place from 26 – 27 September 2019 in Islamabad, Pakistan.Then focused my article on RE in this connotation The main theme of PRES2019 is “Road to Bright and Green Pakistan” PRES 2019 is a unique opportunity to contribute to and learn about the latest renewable energy development in Pakistan and other emerging markets. Pakistan has become a sizable renewable energy market. The government plans to announce the new policy mandating that 30% of Pakistan’s power needs will be met through renewables by 2030. As the government considers options to make RE cornerstone of the country’s energy supply, PRES2019 provides a platform for the local and international renewable energy industry to connect and network with each other. Renewable energy experts from different parts of the world will gather at PRES2019 to discuss lessons learned and success stories in the renewable energy sector. WWEA, Global 100% RE and supporting partners invite the renewable energy community from around the world to join us to help make the benefits of renewable energy available for all human beings.

The Islamic Republic of Pakistan is is a country in South Asia covering an area of 796,095 km2 governed by a federal parliamentary constitution. She shares a total of 6,774 km of land borders with Afghanistan, China, India and Iran, and has a 1,046-kilometre coastline along the Arabian Sea and the Gulf of Oman in the south. It is globally the sixth most populous country with a population exceeding 204.171.199 people (The current population of Pakistan is 204,299,909 as of, June 02, 2019, based on the latest United Nations estimates.) and a comparatively high population growth rate of 1.5%. 39.8 % of the population is urban (81,499,983 people in 2019) Pakistan is a semi-industrialized economy and a per capita GDP of 1561 USD. According to the World Bank, Pakistan has vital strategic endowments and development potentials. Its labor market is the 10th largest globally and Pakistan is number 67 amongst the global exporters. Yet, there is a significantly huge inequality within the society (Gini: 30 as per World Bank) and still 21% of the population lives under the poverty line The current population of Pakistan is 204,171,199 as of Friday, May 24, 2019, based on the latest United Nations estimates. [i] Overpopulation, climate change and a weak energy sector due the lack of visionary policy are the primary problems of Pakistan, . As Pakistan is undertaking rapid economic and industrial development, the strong energy demand growth across the country is being stimulated Pakistan can offshoot social and economic development with renewable energy and with smart Renewable Solutions while increasing energy security and improving energy access, Pakistan is rich in renewable energy potential, and can with this assessment develop policies, investment opportunities and energy development actions to harness it,

In country like Pakistan, where agriculture continues to form the major portion of national economy and increasing importance is laid upon industrial development, the need for optimum development of Water and Power resources cannot be over-emphasized according to Federal Ministry of Energy Power Division of Pakistan ; [ii]The primary energy supply amounts to over 70 million Tons of Oil Equivalent (TOE). Oil and gas are by far the dominating sources with a share of 80%. Oil is imported from the Middle East primarily Saudi Arabia, gas from Iran. In addition, Pakistan is consuming Liquefied National Gas (LNG), Liquefied Petroleum Gas (LPG) and coal. Pakistan has currently, 4 power plants with a total capacity of 755 MW; additional 3 are under construction. Nuclear power accounts for around 1.9% of the total installed capacity in Pakistan. Hydropower has a share of 13% whereas other renewable energies only play a minor role. The government is supporting the use of LPG for cooking resulting in rapid investment in production, storage and establishment of auto stations of LPG. Historically, Pakistan has always been an energy importer and is highly dependent on fossil fuels. With the rising fossil fuel prices, the cost of oil importing is creating a dent on Pakistan’s foreign exchange reserves. The rising oil price along, with the rising demand for uninterrupted power, is creating extra pressure on the already fragile electricity grid of Pakistan. Therefore, to meet this increasing demand, the Government of Pakistan, in its new budget for the fiscal year allocating significant amount of money to its energy development portfolio. About 80% of this budget intended to be spent on generating power from solar, biomass and biogas. Pakistan aims at achieving 5-6% of its total on-grid electricity supply from renewables (excluding large hydropower) by 2030. Total installed power capacity stood at 26 GW at year-end 2016, of which 4.2 % was RE.

In the meantime Electricity Production in Pakistan decreased to 8556 Gigawatt-hour in December from 9020 Gigawatt-hour in November of 2018. Electricity Production in Pakistan averaged 8122.33 Gigawatt-hour from 2003 until 2018, reaching an all-time high of 15790 Gigawatt-hour in August of 2018 and a record low of 4195 Gigawatt-hour in December of 2010.[iii]

[iv]According to opinions leaders and experts based on facts and figures, Pakistan’s onshore natural gas production has been decreasing after years of under-investment, leading to the commencement of liquefied natural gas imports in recent years. Rising demand for the fuel has made the drillers more assured that they may sell any gas from a sizable development.

On May 2019, Federal Minister for Energy Omar Ayub Khan on Friday said that the report on any discovery of energy reserves at Kekra-I offshore drilling site will come within three to four weeks. Exxon Mobil President Irtiza Syed briefed the minister about the status of offshore drilling at Kekra-I that started in January 2019. He added that Exxon Mobil is also interested in the drilling of more offshore blocks .Drilling was on final phases where it will be easy to ascertain the presence of oil or gas deposits.Recently international energy research agency Rystad Energy in a report said that the Eni-led Kekra project for oil and gas reserves in Pakistani waters is among three highly prospective wells in the world.The research agency in its report on the prospective new discoveries of energy resources said that Kekra well in Pakistan has pre-drill prospective resource estimates of 1.5 billion barrels of oil or equivalent.A group of multinational companies had started offshore drilling in January for exploration of oil and gas. A major drilling ship, “Mother of All Rigs” along with three supply vessels started the drilling at the site.The companies are drilling Kekra-1 well in Indus-G block, which is located some 280 kilometres away from the Karachi coast.

On June 04th, 2019 At last the drilling at Kekra-1 well in G-bloc, Pakistan’s ultra-deep sea has begun after a long pause of over almost 23 days and come into the final phase by reaching the depth of 5,148 meters and will reach at the required depth of 5,460 meters within days, a senior official told The News. The joint venture headed by ENI is operator comprising Exxon Mobile, OGDCL and PPL started the drilling on January 13, 2019 at the cost of sunk money of $75 million, which has increased to $90 million so far.When the drilling reaches the depth of 5,460 meters, the official said, the operator will likely do wire line logging which could take another three or four days. This will likely be followed by another casing and cementing exercise that can take four to six days. At this stage a substantial amount of information regarding the well prospects will be known, however, the results (discovery or dry well) will require completion of proper testing. Spokesman for the Petroleum Division Additional Secretary Sher Afgan confirmed that the drilling has entered the final phase and reached the depth of 5,148 meters and only 312 meter is left to be spudded as it has to reach almost 5,500 meters. He said after reaching the required depth the operator will get the specimen that will be sent to Italy for information if there is a reservoir of oil and gas in the well or not. The last snag hit the drilling when the blowout preventer (BOP) that prevents from any blow out or any kick pressure that can result into eruption of fire, had gone out of order and its repair took some days and then its testing took the reasonable time. Before it, the drilling stopped on April 8, 2019 due to the cementation and casing continued owing to which the drilling could not start.So far the drilling witnessed many upheavals starting from January 2019 up till now and it has got delayed by one month as it was earlier scheduled to get completed by April end which is now rescheduled up to the middle of May at the maximum. The drilling was initiated with 19 percent probabilities, which, according to the experts, get reduced when side tracking starts taking place. In Kekra-1 well case, second side tracking was underway. Officials said when side tracking process was initiated, this means that first plan of drilling was not well worked out. Formerly when at Kekra well vertical drilling reached at depth of 4,799 meters on February 21, a high pressure was felt causing huge mud loss and because of hazardous and unsafe operation the well was plugged by March 23. Then the first side tracking started and when it reached down to 3,100 meters, it again met failure, which is why the hole was also blocked. After that the second side tracking began which is still underway and may reach at the required depth within days.

Pakistan is intensely blessed with a great potential of renewable energy(RE) resources, but so far, only large hydroelectric projects and few wind and solar projects have harnessed this potential.

Pakistan contains vast RE potential. The U.S. Agency for International Development and the National Renewable Energy Laboratory estimate there is more than 132 gigawatts (GW) of wind energy capacity alone across the country. In order to capitalise on this potential, General ElectricGE) is providing engineering, procurement and construction (EPC) contractor HydroChina with thirty three GE 1.5-82.5 wind turbines for the Sapphire 50 megawatts (MW) Wind Farm Project to be implemented in the Gharo-Keti Bandar Wind Corridor in Jhimpir, Sindh. GE will also provide 10 years of operations and maintenance services as part of the contract.

The facility is the first wind farm in Pakistan to be awarded feed in tariff (FIT) by the National Electric Power Regulatory Authority (NEPRA). It is of further significance as it is the first wind farm in the country to be funded through the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, which mobilizes private capital to help solve critical development challenges. As a long term partner dedicated to the country’s growth, GE[i] played an instrumental role in helping Sapphire achieve financial closure with OPIC.Together with their partners, GE remain committed to provide proven solutions to create greater value for Pakistan.[ii]

In Pakistan, RE accounts for 1136 MW presently installed capacity of solar PV, wind and biomass based power projects. Possibilities also exist in promoting greater use of wind, solar and biomass project. Previously Government of Pakistan (GoP) had announced various policies and enabling environments such as feed-in tariff/upfront tariff, tax incentives, net metering, long term refinancing facility and micro-financing schemes for promoting corporate sector investment in the renewable energy (RE) sector. Taking the market growth, technological developments, recent cost reductions and new financial mechanisms into account, the GoP decided to liberate the market and instigate more competition amongst the private sector players for delivering electricity from RE resources (i.e. wind/solar) at optimal tariff rates. Accordingly, the GoP introduced tenders to call for competitive/reverse bidding for the RE power projects and the first phase of bidding for wind power projects has been initiated. Pakistan has a potential for wind energy specially in the southern coast and coastal Baluchistan. The wind speed is on average 7-8 m/s at some sites along the Keti Bandar-Gharo corridor. Mainly in the southern regions of Sindh and Baluchistan, the technical potential of wind power is high along the 1,000 km of coastline where wind speeds range between 5 and 7 m/s. The potential capacity for wind energy is estimated at 122.6 GW per year, more than double of the country’s current power generation level A newly completed wind farm in Gharo, Sindh Province, is one of a series under construction in Pakistan to reduce the country’s serious energy deficit.

The solar potential is estimated to be over 100,000 MW. Pakistan has a high solar potential. Irradiation across the country is around 4.5-7.0 kWh/m²/day.

Only about 5 to 6 percent of the power to Pakistan’s national electrical grid currently comes from renewable energy(RE) The Pakistan government has proposed a five-year exemption of taxes for manufacturing of solar and wind energy equipment in its budget bill, reported Reuters. The tax break is expected to boost the local manufacturing of equipment needed for renewable power expansion in the country as only about 5 to 6 percent of the power to Pakistan’s national electrical grid currently comes from RE, according to the country’s Alternate Energy Development Board (AEDB).[iii]

In comparison, RE accounted for approximately 22 percent of India’s power capacity mix at the end of December 2018. Pakistan suffers from power shortages and long power cuts. “Pakistan is paying the heavy cost of an ongoing energy crisis prevailing for the last many years. In such difficult time, the promotion of renewable energy(RE) resources likes wind and solar has become indispensable,” said Finance Minister Asad Umar in his budget speech, as reported by Reuters.Nevertheless, everyone does not feel that tax reduction will be enough to drive the growth of local manufacturing in the country’s renewable industry. Naeem Siddiqui, the chairman of Ebox Systems, which assembles solar panels in Islamabad, said, “The government has already waived off taxes and duties on the import of RE products, and local manufacturers cannot compete with the low-priced imported items.”In this situation, it would be difficult for Pakistani manufacturers to compete with tax-free, low-priced imports of solar panels and other renewable energy equipment. Presently, Pakistan imports more than 95 percent of the solar panels and other RE equipment, especially from China.“As long as the government will not impose duties on the import of finished products, the local market cannot grow”, said Aamir Hussain, chief executive officer of Tesla PV, one of the largest manufacturers of solar energy products in Pakistan to Reuters.Muhammad Abdur Rahman, managing director of Innosol, a company that imports and installs RE systems, said, “The local industry is facing with pricing issues due to low-quality solar energy appliances being imported in the country that are very economical as compared to the local market. ”Pakistan presumes that the new policies will help the share of RE to reach 28 to 30 percent in national electrical grid by 2030.Mercom has reported in the past how Pakistan is gradually turning to solar power to meet its energy requirements. In June 2018, the World Bank pledged over $500 million for two renewable energy projects in Sindh, Pakistan. The projects will help in the development of an economic corridor along the Khyber Pass and are expected to accelerate economic activities between Pakistan and Afghanistan. Pakistan has been a member of the World Bank since 1950. According to the bank, it has since then, provided $33.4 billion in assistance.

This article shall review the recent developments pertaining the Renewable Energy in Pakistan

RENEWABLE ENERGY

Pakistan is rich in renewable energy(RE) potential, and can with this assessment develop policies, investment opportunities and energy development actions to harness it, Pakistan receives massive amounts of sunlight all through the year and geographically lies in the sun belt.[iv]

On 04 April 2019 and on the basis of Renewablesnow.com, Pakistan will seek to boost the share of renewables in its total power generation mix to 30% by 2030 under a plan suggested by the country’s new government. The proposal is to lift that share from the current 4% by enhancing generation from wind, solar, small hydro and biomass plants, the World Wind Energy Association (WWEA) announced on Tuesday. The share of large-scale hydropower, meanwhile, is also set to expand to 30% from around 25% now. Pakistan’s Cabinet Committee on Energy is estimated to approve the country’s 2019 renewable energy policy that will include all future renewable energy projects. According to WWEA the government’s plan to have around 18 GW of installed RE capacity by 2030 could limit the expansion of coal-fired capacity of over 5 GW. It also noted that the new policy should include a strategic action plant creating a favorable environment for coordination between various departments in the RE sector.

According to official site of Alternative Energy Development Board (AEDB) of Ministry of Energy Power Division of Government of Pakistan;[v]Alternative Energy Development Board (AEDB) is the sole representing agency of the Federal Government that was established in May 2003 with the main objective to facilitate, promote and encourage development of Renewable Energy in Pakistan and with a mission to introduce Alternative and Renewable Energies (AREs) at an accelerated rate. The administrative control of AEDB was transferred to Ministry of Water and Power in 2006. The Government of Pakistan has inter alia mandated AEDB to: Implement policies, programs and projects through private sector in the field of ARE, Assist and facilitate development and generation of ARE to achieve sustainable economic growth. ,Encourage transfer of technology and develop indigenous manufacturing base for ARE Technology,Promote provision of energy services that are based on ARE resource,Undertake ARE projects on commercial scale (AEDB Act 2010) .The Government of Pakistan has tasked the AEDB to ensure 5% of total national power generation capacity to be generated through renewable energy technologies by the year 2030. In addition, under the remote village electrification program, AEDB has been directed to electrify 7,874 remote villages in Sindh and Balochistan provinces through ARE technologies. The Federal Government established AEDB as a statutory organization by announcing and promulgating the AEDB Act in May 2010. The Act bestowed upon AEDB the authorities and the responsibilities for the promotion and development of AREs.

Although there are plentiful RE resources, there is a significant bottleneck in the energy sector for over a decade with power shortages and consequent load shedding for both domestic and industrialized bodies due to outdated power plants and transmission grid, and shortsighted visionary policy . In sense of installed grid-connected capacity hydropower has conventionally been the most conspicuous source of renewable energy in Pakistan

The new government in Pakistan plans to rise the share of renewable energy in total power generation to 30% by 2030, referring to power from wind, solar, small hydro and biomass. In addition, there is a target of 30% large scale hydropower (more than 50 MW). Currently, the share of renewable energy stands at meagre 4% which is quite negligible despite the fact that the country holds huge renewable energy potential particularly wind and solar. Large hydro provides currently around one fourth of the country’s electricity supply.

During the last week of February(2019), The Cabinet Committee on Energy (CCoE), chaired by the Finance Minister, approved proposals from the Ministry of Energy (Power Division) for all future renewable energy projects to be treated under the Renewable Energy Policy 2019. The new policy, whose guiding principles have already been approved by CCoE, is being reviewed by different stakeholders and will be formally taken by CCoE later. CCoE decided to permit renewable energy projects that have letter of support issued by Alternative Energy Development Board to proceed towards achieving their required milestones in accordance to Renewable Energy Policy 2006. The decision marks a positive effort by the government which seems to favour RE deployment in the future. In addition, the Power Minister announced to take the share of RE at 30% in the total power mix of Pakistan by 2030. Likewise, the government plans to take the share of hydro power to 30% by the same period that would translate into 60% overall share of renewable energy in the total power mix of the country. Targets set by the government are quite remarkable and in line with international climate change commitments. Such a practice sets example for other developing countries to follow.

Air Marshall Shahid Hamid (Retd.), Honorary Vice President of WWEA and Chair of WWEA Pakistan: “It is quite encouraging to observe that the government plans to set higher targets for renewable energy deployment for which we have been advocating for over a decade now. The main mission of WWEA Pakistan Office is to create a bridge between the efforts of the government, the private sector and development partners to advance renewable energy development in the country and beyond. WWEA will play its part in establishing concrete roadmap for smooth transition towards achieving the target of 30% renewable energy in Pakistan by 2030.”

Announcement comes against the backdrop of WWEA’s successful 17th World Wind Energy Conference that was organised in November 2018 in Karachi where more than 600 participants from 30 countries participated. The conference objectives included, inter alia, reviving blocked renewable energy projects in Pakistan and asking the government to set a fresh trajectory for renewable energy development in the country to meet its growing energy demands without aggravating climate change risks. The government’s plan to generate around 18’000 MW of renewable energy by 2030 could hit a roadblock in the shape of pipeline of coal fired projects of more than 5 GW capacities. Government needs to take corrective measure by harnessing cleaner and cheaper sources of power generation. It is worth noting here that the previous renewable energy policy that was announced back in 2006 provided multiple incentives to the private sector to develop renewable energy projects. However, the policy stopped short of achieving desirable results due to absence of action plan complementing the policy framework. The new policy should follow a strategic plan of action by creating a favorable environment for coordination mechanism between various departments dealing the renewable energy sector.

WWEA Secretary General Stefan Gsänger: “The groundbreaking decision to increase the renewable energy share to 30% plus 30% will bring Pakistan to the forefront of renewable energy countries. Such focus on a renewable energy based economy will be very beneficial for the country, its citizens, its industry and its environment. I will not only ensure reliable and secure power supply from domestic sources but also to get control of general prices increases, one of the currently major challenges. WWEA stands ready to continue supporting the government of Pakistan in its objective to increase the share of renewable energy in the country.”

The three-day 8th Edition of Solar Pakistan and 2nd Edition of Electricity Pakistan were started on March under one platform of International Exhibition for Renewable Energy. The Solar Industry mega show, which was organised by the FAKT Exhibitions, will last till Saturday, March 30.Punjab Provincial Minister for Industries, Commerce and Investment Mian Aslam Iqbal inaugurated the historic, mega solar show along with the LCCI President Almas Haider and FAKT Exhibitions CEO Saleem Khan Tanoli.On this occasion, the minister observed that Pakistan has the potential to generate 2.9 million megawatts of clean energy annually from solar, 340,000 megawatts from wind and 100,000 MWs from hydropower.[vi]

Stressing the need for RE, the minister said that the country has tremendous potential to generate power through wind, hydro and solar. He observed that RE would bring manifold benefits to the national economy as it would reduce the cost of doing business, promote industrialization, encourage investment, create plenty of new jobs and enhancing exports. He said that green energy sources like wind and solar were getting a key focus on the global level as they were viable sources of energy at affordable cost.

He said that in the present situation, a fusion of domestic renewable generation and power storage technology seems to be an expeditious, efficient, and affordable answer, which can also cut the costs, incurred in the expansion, operation, and maintenance of the power infrastructure.

Mian Aslam Iqbal appreciated the organizers for holding such a mega exhibition for renewable energy, developing into a major platform for Solar Industry. He hoped the event would employ the best practices that are recognized worldwide to compete on international standards.

The CEO said that the exhibition has provided the latest and state of the art technology and equipment used in the solar industry. He also stated that Solar Pakistan 2019 is a premium platform for all renewable energy stakeholders, government regulators, associations and academia to enhance business networking, knowledge sharing and to build profitable relationships in the long run. The Solar Pakistan 2019 aimed at promoting trade between Pakistan and international countries in order to support the economy. The exhibition showcased modern equipment and technology with tremendous foreign participation and is bound to help the growth of Pakistan’s promising solar industry.

Mismatch between energy demand and supply from last two decades has been increasing because of the domination of expensive imported oil in energy mix of Pakistan. Sustained economic condition of a country is owing to the sustainability of its energy sector. In thie paper of Muhammad Kamran current position and future success of Renewable Energy (RE) under the light of operational and under construction RE projects such as solar, wind, biomass, biogas and hydro power are discussed along with that role of organizations and institutions in RE field is studied. Based on his study, the results indicate a change in present energy mix by giving share to the RE sources and domination of RE sources in future energy mix in view of ongoing major RE projects encouraging the eradication of demand and supply gap. The overall results envisage a success of RE in future of Pakistan and will intrigue not only local as well as foreign investors to invest in energy sector of Pakistan[vii]

The first ever Pakistan Renewable energy Summit 2019 (PRES2019) will be taking place from 26 – 27 September 2019 in Islamabad, Pakistan. [viii]With the broad message of “Achieving 30% Renewable Energy by 2030”, PRES2019 will focus on the opportunities offered by innovation and modernization of renewable energy technologies inclusive of solar, Wind, micro-mini hydel, Waste to Energy, Bio -fuel, geothermal, hydrogen fuel cell etc. to meet growing energy demands of Pakistan and the developing world in an affordable and functionally reliable way, without exacerbating climate change risks.The article herein can be extended later based on the prospective visions emerged after the Summit.

To sum up, overpopulation, climate change and a weak energy sector due the lack of visionary policy are the primary problems of Pakistan, . As Pakistan is undertaking rapid economic and industrial development, the strong energy demand growth across the country is being stimulated Pakistan can offshoot social and economic development with renewable energy and with smart Renewable Solutions while increasing energy security and improving energy access, Pakistan is rich in renewable energy potential, and can with this assessment develop policies, investment opportunities and energy development actions to harness it, The studies concerning in this connotation evidently demonstrate that RE sources can supplement the energy needs of Pakistan and can provide a sustainable energy base.

[i] GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com